The Indianapolis journal. [volume] (Indianapolis [Ind.]) 1867-1904, 1887-03-01


Total Sc. 296. 26S 80
Leaving balance of ST. l28 1871 u to be carried
to net or ledger assets.
MORTALITY.
The mortality loss in 1886 was more favorable
than that in 1855 by 1929, GAL, and was over $780,
900 less than was to be expected by our mortali-
ty table, q saving of moro than one-sixth.
The payment of death losses is the business
Of life insurance company. They are the main
item in the cost of it's insurance Whatever af
1socts the mortality directly affects the cost of in
surarce to a companys members.
In view Of many deceptive statements now
being made to the public, it ought to be known
that the question of a favorable mortality is not
one of small amount of loss, nor of a small
ratio of loss to the business in force nor to
ceipts, nor to new business. These all vary with
circumstances which do not touch the question.
It is a question of the proportion between the
losses to be expected by the table of mortality
used by company in its calculations and the
mortality actually experienced.
This company continues to seek business only
In the healthy parts of our own country, where
the conditions are well known, where selection
OF lives can be most intelligently made. where
business can be most effectively supervised, and
can be done at a minimum of expense.
The advantage OF such course to our mem
bers is manifest in the low mortality com
pared with that expected The average age of
bur policies is perhaps greater than in any other
company; but its mortality is as far below the
liable and its savings great, at least, as those
Of any company proportionally. Experience
proves, what would be theoretically probable,
that the most profitable business is that most
carefully selected, ana which is the most per
sstent. We spare pains in respect of sslec-
ton; and out lapses are much smaller percent
age than those of any other important company.
Moreover, the risk taken any one life is
limited to $50, 900, which sum fairly marks the
golden mean which, the one hand allows
men to make with us large part, if not the
whole of sufficient provision for their families,
aud. on the other hand, is not great as to cre-
ate "a undue moral hazard by exciting des-
perate speculation. leading to an excessive NOR
tality among the large risks, and so unduy in
creasing the money loss and the cost of insur-
ance.
EXPENSES
The second main item in the cost of insurance
is that of expense; and this is more directly con.
trollable than the mortality. tits of the greater
relative Importance at THIS tlme because III the
last ten years the cost Of insurance to the Nom.
bers of all companies that make any dividends
TO their members has been very materially in
creased. The great fail in the rate of interest
has cut down their earnings from interest and
left so much the less to divide. Their members
have either had to pay so much the greater par,
of their premiums in cash. or have received &c
much The less additions to their policies than
they would have done had the interest rate beer
maintained. The cost of insurance to the pre-
MUM payers in all companies now, as compared
with that ten or twelve years ago, is fully 10 pei
cent. greater.
For example: On life policy issued at ag,
thirty for 100000 and which has run ffteer
years, q company would be required to hold
reserve of about Sligo 1t must earn PEI
cent interest on that to keep that account sol
vent: what it earns over per cent is surplus
and may be returned to the policy n older. /
the company can earn per cent. on all it's fund
IL would earn per cent surplus on this reserve
DR. $35 90; but if the rate of interest drops SO i
tan earn only per cent, then it will earn but
per cent surplus, or $lIGi, and the policy
holder will have much less to pay his premi
nm with or TO buy additions to his policy.
In view of the fall in interest which has taker
place and the consequent Increase in cost t.
solicy it would have seemed but natura
hat managers should nave made serious efor
o Offset this increase by reduction in expenses